Providing perspective on the economics and politics of sports business in Florida...and the Rays' campaign for a new stadium in Tampa Bay.

Tuesday, November 20, 2012

Fallout from the Rays' Stadium Finance Study

If there's one thing a Monday stadium financing press conference guaranteed, it's a week's worth of opinions in print, over the air, and around water coolers. So before the Tampa Bay Times editorial board has a chance to applaud the finance caucus for tackling a taboo issue and before the columnists have a chance to question the worthiness of a stadium project, here are my morning-after thoughts:

The chambers of commerce working on the stadium finance study may have done as much to hurt the Rays' stadium campaign as they did to help it.

Yes, the report addressed the elephant in the room: the impossibility of building a stadium these days without public dollars. But it also exposed the great sacrifices a single county may have to make to pool enough money together for a stadium.

WATCHDOG WARNINGS
The first alarm that went off in my head yesterday was the chambers' advice to act quickly. Why? Because stadium supporters don't want the current stadium funding streams to be re-dedicated in 2016 to things like schools, police stations, or fire trucks...or, back to the taxpayers of St. Pete and Pinellas County.

Furthermore, other revenue streams (like sales taxes and capital funds) would have to be re-directed toward a stadium. There won't be many politicians willing to stick their necks out for a plan that could face objections from both the left (police, fire, and teacher unions, just to name a few) and the right (tea partiers, tax watchdogs).

There are already commissioners in both Hillsborough and Pinellas counties against spending general revenue money on a new stadium.

The caucus also didn't take into account how much more the project would cost (up to $100 million?) if the St. Pete contract has to be bought out before 2027. This factor, as well as how much St. Pete could make by selling the old stadium site, is why Pinellas still has a huge leg up on Hillsborough in the competition/collaboration for a new stadium.

Field of Schemes' Neil deMause also points out there's no guarantee the Rays will kick in the samecan't kick in more than the $150 million they proposed in 2008, but $150 million may be a reasonable starting point, considering the chamber caucus worked with the team for part of its report. One of the biggest disappointments - but not surprises - to those following the Stadium Saga is that the Rays didn't share any financial data other than (possibly) confirming that the 2007 & 2008 financials, leaked several years ago, appear to be accurate.

When I asked Sykes why he thought the Rays need a new stadium, he said:

"I don't want to get into some of the gossip, but when you hear concerns about Major League Baseball contracting, well then, the logic is, 'my goodness, if we're having to give $35-$39 million (to small-market teams),' or maybe it's more, that doesn't help the argument because some (large-market) teams are saying, 'well, heck, just buy out the (small-market) teams and let us keep that piece (of revenue sharing).' "

OTHER CAUCUS OVERSIGHTS
Presenting the report, Chuck Sykes from the Tampa Chamber said attendance was the only real variable the Rays could improve upon to boost payroll. But when I asked if the group had studied the surging television rights that are multiplying teams' revenue streams - television rights the Rays are due to re-negotiate in a couple of years - he said they did not.

Sykes indicated the Rays will get new TV money regardless of the stadium situation, but the caucus failed to work it into the equation of the team's financial future.

The caucus also acknowledged the likelihood that a new stadium would mean higher prices on tickets, parking, concessions, and souvernirs....but failed to address how the expenses might diminish the effect on attendance of a new stadium.

Sykes, with obvious reference to Marlins Park's disappointing first year, said new stadiums only meet their attendance goals when the home team is a winning one. But it's a big leap of faith to assume the Rays will be good for decades to come.

The chamber is also asking fans to take a big leap of faith when - and if - the Rays sign a new long-term contract in Tampa Bay.

How, other than taking the team's word for it, can taxpayers be sure the new contract is "ironclad," as opposed to the current "ironclad" contract?

WHAT'S NEXT
There still is promise for the two chambers of commerce to act as a prime condiut for negotiations between the Rays and St. Petersburg. But ultimately, the stalemate continues on. Because I'm lazy, I'll simply wrap up this post the same way I wrapped up an early 2011 post on stadium finance studies. Just substitute "2013" in for "2011":

Which means 2011 may look a lot like 2010 in the Stadium Saga. A report comes out; the team and politicians go through their song-and-dance with the media; and nothing changes.

As I've said before, this process will likely play itself out over a number of years, not months. And it will undoubtedly get tense, if not ugly.

The lone bright spot for the Rays' efforts is new Tampa Mayor Bob Buckhorn has been a stadium advocate and may give them the power and/or leverage they need to get the ball rolling. How active he wants to be could determine how quickly the Stadium Saga plays out.

8 comments:

I actually meant the exact opposite: How come the assumption is that the Rays can only kick in $150 million? Yes, that's what they offered in 2008, but that doesn't mean it's necessarily acceptable, or even necessarily all they can offer. Maybe I spend too much time negotiating with 9-year-olds, but I'm very aware than when presented with a ridiculous proposal, it's okay to say, "Well, I guess you're not going to get what you want, then."

I like most should assume these are "ballpark" numbers, which should change to a different ratio before the ink hits the paper. I also would assume they more about each others financial situations then there leading on, though it does sound like they need to do more research on not just the Rays future finances, BUT also Hillsborough's future revenue from having a MLB team play in there county, and all the tax revenue, future impact of new business development around the park, revenue from out-of-town people spending that wouldn't of if they weren't coming from (Orlando, Ocala, Wesley Chapel, ect.)to see a MLB game, having more millionaires living and spending within Hillsborough, the extra events, concert, and an All-Star game, AND ALL the tax revenue Hillsborough would be set to gain from ALL thee above...

OK, though most of the Rays (and future) players, coaches, and front office will more then likely live in Tampa then St. Pete or Clearwater, NOT including all the tax revenue from over a 1000 other people working @ the stadium during any gameday (NOT including all the other jobs created from other businesses out and around Channelside that would prosper from the new Trop)...The only reason why Pine. has a higher average income is because of it's location. Pine co. has a lot more waterfront real estate that mostly (retire) of the 1% can afford, NOT because more pop. of wealthy WORKING class lives and works in Pine than Hills...Beazy

Though property and estate values will continue to rise with the improving economy and with inflation, I'm inclined to believe the makeover Channelside is set have (including a new Major League ballpark) that Vinik, Stu, and over financial elitist involved are planning should boost the value of areas like Ybor, Davis islands, downtown, and other communities accessible by the River Walk, which being less then a mile from 1 of the best entertainment hubs in America will become a great selling tool for realtors...But, that's all based on the speculations of building what supposed to rival LA's 1 stop shop for everything entertaining (instead of NBA we'll have MLB). Also, if I-4 is the future of Florida's population boom, having what IS speculated by some for Channleside WOULD bring everyone out I-4 down the road to Tampa for generations to come which WOULD also bring there money here...Beazy